What are Free Trade Agreements (FTAs)?

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What are Free Trade Agreements (FTAs)?

On May 31, 2016, Posted by , In Singapore,Singapore Tax,Tax, By ,,,,,, , With Comments Off on What are Free Trade Agreements (FTAs)?

What are Free Trade Agreements (FTAs)?

FTAs are treaties between two or more economies to bring closer economic integration by reducing or removing trade barriers, encouraging and promoting businesses to trade regionally and internationally.

FTAs can potentially reduce one of the cost components – import duties, which could make your exports more competitive than exporters from non-FTA partner countries. FTAs can also allow for increased export quotas. The preferential rates under FTAs are legally binding and signatory countries have to abide by the concessions offered.

What do FTAs cover?

FTAs generally cover one or more of the three basic areas of trade liberalisation: Trade-in-Goods, Trade-in-Services and Investments. Other components such as intellectual property protection, government procurement, electronic commerce and other cooperation measures may be included.

How many FTAs does Singapore have?

Singapore has a network of 20 implemented FTAs with 31 trading partners. Singapore has also concluded and signed FTAs that are not ready for use yet, and is still negotiating on some NDAs.

Why can’t we use an FTA after it has been concluded and signed?

Once an FTA has been concluded and signed, it typically has to go through a domestic ratification process, i.e. formal approval from the Cabinet/Parliament before the commitments of the FTA enter into force.

Are there possibilities for the commitments in our FTAs to be improved in the future?

Yes. Singapore’s FTAs contain provisions for reviews to be conducted periodically, which provide opportunities to improve the commitments in these agreements to facilitate businesses.

How do we make use of FTA for the export of goods?

Step 1: Find out the FTA which Singapore has with that particular country of interest.
Step 2: Find out the Harmonised System (HS) code of your produce.
Step 3: Check if the product is offered tariff concessions under the FTA.
Step 4: Check that the product satisfies the Rule of Origin to qualify under the FTA.
Step 5: Comply with the documentary requirements.

How do I know which FTA would be most applicable to my product if there are two or more FTAs which my importing country is a party to?

Step 1: Check the savings each FTA is able to provide.
Step 2: Check if your product is able to meet the Rules of Origin.
Step 3: Select the FTA which your product is able to meet the Rules of Origin and provides the most savings to you.

VALON can be your resource and business partner in Asia. Should you wish to receive more detailed information on VALON, please do not hesitate to contact us at enquiry@valoncorp.com.

 

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